GES AD1 Promotion Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Procuring cause

The broker whose efforts initiated an uninterrupted chain of events leading to the sale; determines commission entitlement in open listings and disputes.

Dual agency

Representing both buyer and seller in the same transaction with informed written consent; loyalty and full disclosure duties are limited.

Trust account

A separate account holding client funds such as earnest money; commingling with operating funds is prohibited and requires reconciliation.

Ready, willing, able buyer

A buyer who accepts the seller's terms, has the financial ability, and is prepared to close; triggers commission in many listing agreements.

Statute of frauds

Requires certain contracts, including land sales and leases over one year, to be in writing and signed by the party to be charged.

Quitclaim deed

A deed conveying whatever interest the grantor may have without warranties; offers the least protection to the grantee.

Adverse possession

Acquiring title by actual, open, notorious, exclusive, hostile, and continuous possession for the statutory period.

Race-notice statute

A recording statute protecting a subsequent purchaser who records first and takes without notice of prior unrecorded interests.

Fair housing protected classes

Federal classes include race, color, religion, sex, national origin, familial status, and disability; state and local laws may add more.

Sales comparison approach

Valuing a property by adjusting recent comparable sales for differences in time, location, size, condition, and features toward the subject.

Capitalization rate

The rate used to convert net operating income into value; value equals NOI divided by the cap rate.

Highest and best use

The use that is legally permissible, physically possible, financially feasible, and maximally productive, producing the highest value.

Absorption rate

The pace at which available units are sold or leased in a period; months of inventory equals active listings divided by monthly absorption.

Gross rent multiplier

Sale price divided by gross monthly rent; a quick income-property comparison tool that ignores operating expenses.

CMA

Comparative market analysis: a broker's opinion of value based on comparable sales, used for pricing and listing presentations.

Exclusive right to sell

A listing giving the broker commission regardless of who procures the buyer during the listing term.

Confidentiality duty

A fiduciary obligation not to disclose the client's financial position, motivation, or terms without consent; survives termination.

Truth in advertising

Advertising must be accurate, include the broker's name, and avoid misleading claims or discriminatory content.

LTV ratio

Loan amount divided by the lesser of appraised value or purchase price; determines down payment and mortgage insurance.

PITI

Principal, interest, taxes, and insurance; the total monthly housing payment used in qualifying ratios.

Discount point

One percent of the loan amount paid to reduce the interest rate; distinct from origination fees.

RESPA Closing Disclosure

A required form delivered at least three business days before closing, itemizing loan terms, costs, and cash to close.

Capital gains exclusion

Up to $250,000 single or $500,000 joint of gain excluded on a primary residence after two of five years.

1031 exchange

Deferral of capital gains tax when reinvesting proceeds from like-kind investment property; taxable boot is recognized.

Fiduciary duties

Loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care owed by an agent to the client.

Blockbusting

Inducing panic selling by suggesting that members of a protected class are moving into a neighborhood; a fair housing violation.

Steering

Directing buyers toward or away from neighborhoods based on protected characteristics; prohibited under fair housing law.

Reasonable accommodation

A change in rules, policies, or practices to allow a person with a disability equal housing opportunity.

Three-way reconciliation

Monthly comparison of trust account book balance, bank balance, and individual ledgers to ensure funds are accounted for.

Designated broker

The licensed broker responsible for supervising office licensees, trust accounts, advertising, and regulatory compliance.

Independent contractor status

A licensee relationship based on control factors; affects taxes, benefits, and supervision obligations.

E&O insurance

Errors and omissions coverage protecting brokers and agents against negligence claims arising from transactions.